Press baron, bon viveur, peer - and criminal

Published on 14/07/2007 02:21

AS A man fascinated with the rise and fall of great historical figures, the irony is poignant. Conrad Black, who turned a £234 investment in two weekly papers into what, at one point, was the world's third biggest media empire, is today facing the prospect of jail.

The heavily set, silver-haired multimillionaire showed no emotion when the jury delivered its guilty verdicts. But that prospect will be particularly cruel for a man whose byzantine lifestyle became a byword for extravagance. A corporate jet is his preferred mode of travel; his chosen contemporaries are fellow media moguls and society's beautiful people.

Combative is a term commonly applied to the tycoon. In one newspaper interview, he declared: "Humility is a good quality, but it can be overdone." His own defence team acknowledged he was arrogant but protested that did not necessarily make him guilty.

Over the course of a 15-week trial, Black's imperious nature emerged time and again. While the peer himself fell increasingly silent as the trial wore on, the peremptory tone of his previous e-mails and notes told its own story. In an e-mail to one of his New York editors discussing a trip to Bora Bora in the Pacific, Black referred dismissively to his fellow holidaymakers as "loutish young men and their perky wives".

But his trial took place in a United States that, in the wake of corporate scandals such as Enron, WorldCom and Tyco, has shown itself increasingly less tolerant of robber barons. Assistant US attorney Jeffrey Cramer set the tone in his opening statement in the Chicago courtroom as he surveyed Black and three fellow former Hollinger executives in the dock: "Bank robbers wear masks and use guns. Burglars wear dark clothing and use a crowbar. These four, three lawyers and an accountant, dressed in ties and wore a suit."

Born in Montreal, the son of a brewery executive, Black grew up amid the trappings of privilege. From an early age, he appeared to mix entrepreneurial flair with a cavalier disregard for the rules. At the age of 14, he was expelled from Toronto's elite Upper Canada College after being caught selling his classmates' stolen exam papers. However, his academic career concluded with a law degree and an MA in history.

His rise to prominence began in 1967 with an investment in two Quebec weekly papers, and he went on to buy small Canadian titles over the next few years, co-founding the Sterling Newspapers Group in 1971. Seven years later, he became chairman of the Canadian Argus media group, a company he used as a platform to launch the Hollinger group.

The bluff Canadian became a presence on the UK media scene in 1985 when he bought the Telegraph group. Relentless acquisitions followed and, by the 1990s, he controlled 60 per cent of Canadian newspapers, along with hundreds of dailies in England, the US, Australia and Israel. The flagship titles included the Chicago Sun-Times and Jerusalem Post.

Black reached the apogee in 1999 as the Hollinger group, then the third biggest newspaper company in the world, earned revenues of 1 billion.

In 2001, his British establishment status was underlined when he was ennobled as Lord Black of Crossharbour, taking his place in the Lords as a member of the Conservative Party. In some quarters, he was considered far more acceptable than Rupert Murdoch, the anti-establishment Australian. Black had, of course, shown himself willing to pitch his Daily Telegraph into a circulation war in the early 1990s with its broadsheet rival, the Murdoch-owned Times.

Andrew Neil, an old media colleague of Black, said the tycoon was fiercely proud of his peerage. "It could not be more important to Lord Black," he said.

"He owned newspapers in this country, not just for reasons of political influence but because he wanted to climb to the dizzy heights of the British social system, and being inaugurated into the House of Lords by Margaret Thatcher was an example of that."

The unravelling of Black's empire - and, ultimately, his trial - had its origins in the large-scale sell-off of local papers across the US and Canada initiated by Black in 1998.

Companies that bought newspapers in a number of these deals signed so-called "non-compete" arrangements, for which the new owners paid millions of dollars to Hollinger International's headquarters in Chicago in return for an assurance that Hollinger would not go into competition with them.

Prosecutors argued that the buyers never asked for most of the non-competition agreements and that the payments were actually unapproved, disguised bonuses. Disquieting rumours about the running of the Hollinger group began to spread as institutional investors queried these transactions and, in the first of the ignominies to befall him, Black was forced to resign as chief executive of the Hollinger group in November 2003, and as chairman two months later.

These non-compete agreements, the prosecution alleged, ultimately led to 30 million worth of shareholders' money being illegally siphoned off to Black and his three fellow defendants. They were, the court was told, quite simply "$60 million thieves wearing ties".

Black was convicted on three counts of fraud and one of obstruction of justice. The latter arose because he was captured on videotape removing 13 boxes of documents from his Toronto offices, despite a court ban on removing potential evidence.

The Chicago court heard a great deal about Black's lifestyle.

In his second wife, Barbara Amiel, a former Daily Telegraph journalist, he had found a perfect complement for his apparently limitless craving for the good life. They were an A-list couple, known for throwing lavish parties at their Kensington home in London. One famous photo seems to capture the heady excess - Black is seen arriving at a Kensington Palace fancy-dress party garbed as Cardinal Richelieu, with Amiel, striking as a glamorous Marie Antoinette, by his side.

They owned mansions in Toronto and Palm Beach, Florida, along with an apartment in Manhattan's Park Avenue. The New York flat's contents were positively baroque: they included Napoleon Bonaparte's shaving stand and a set of marble elephant carvings that cost 8,900, a heated towel rail costing 2,200 and a set of Louis XVI painted stools with a 4,900 price-tag.

Black was, in fact, cleared of the charges relating to his lifestyle. These charges included using 23 hours of flight time on the company jet, at a cost of 270,000, to go on a two-week private holiday with his wife to Bora Bora in 2001. Another alleged he had wasted 21,000 of the firm's money on a lavish birthday party for Amiel at New York's upmarket La Grenouille restaurant. Dom Prignon champagne ran freely and beluga caviar was on hand: the Blacks mingled with guests including Henry Kissinger, Donald Trump and New York's mayor, Michael Bloomberg.

Black, whose biography of Richard Nixon was published only this year, may feel parallels with another talented man forced to leave office. But, unlike Nixon, Black has never put his hands up and, friends say, feels himself to be fundamentally innocent.

Black's biographer, Tom Bower, has a more simple explanation for the downfall of a 20th-century media mogul.

"Conrad Black is unfortunately the architect of his own downfall," he said. "He was greedy, he was reckless and he lived beyond his means. He was a millionaire trying to live like a billionaire, and in the end it caught up with him."

Fallen media mogul convicted of fraud

CONRAD Black could spend the rest of his life behind bars after being found guilty of pocketing money that should have gone to shareholders.

The former Daily Telegraph owner, 62, was convicted of three counts of fraud and one count of obstruction of justice. He faces a maximum of 35 years in jail and a fine of up to the equivalent of 500,000.

The Tory peer, whose official title is Lord Black of Crossharbour, was acquitted of nine other counts, including racketeering and misuse of corporate perks, such as taking the company plane on a holiday to Bora Bora in the Polynesian Islands and billing the company 20,000 for his wife's birthday party.

His lawyers immediately launched an appeal against the verdict. He is due to be sentenced on 30 November.

After the verdicts were delivered to a packed Chicago courtroom, prosecutor Eric Sussman called for him to be jailed, declaring that, "very conservatively", Black was looking at a sentence of 15 to 20 years.

The jury heard details of Black's lavish lifestyle, which the prosecution claimed was partly funded through fraud.

Black did not show any emotion when the verdict was read out by US District Judge Amy St Eve. His wife, Barbara Amiel, and his daughter Alana leaned over to console him.

Black, wearing a cream suit with a blue shirt and tie, heard each juror tell the judge that the verdicts she read out were the verdicts of them all.

Black's three co-defendants were all found guilty of three counts of mail fraud. They are former Hollinger International vice-presidents John Boultbee, 64, of Vancouver, and Peter Atkinson, 60, of Toronto, and an attorney Mark Kipnis, 59, of Chicago. They each face up to 15 years in prison and fines of up to 375,000.

The jury delivered its verdict on the 12th day of deliberations following a trial which lasted 14 weeks. The jury had to consider 42 counts against Black and his three co-defendants in a highly complex trial.

They had heard the prosecution allege that the 30 million involved in the fraud mainly came from the sale of hundreds of Hollinger-owned US and Canadian regional newspapers between 1998 and 2001, in which the buyers paid large sums in return for non-compete agreements.

The judge adjourned Black's bail proceedings until Thursday to allow his defence team to consult Canadian lawyers.

Black handed over his UK passport to the court. He will remain in the Chicago area until next week.

Last night, the Conservative Party announced it was withdrawing the whip from Black. "In the light of this verdict, the Conservative whip will be withdrawn from Lord Black," a party spokeswoman said.

The Liberal Democrats stepped up calls for Black to be stripped of his peerage. The party's justice spokesman, David Heath, insisted that any members of the House of Lords convicted of serious offences should be kicked out.

He said: "It is quite wrong that individuals convicted of serious offences either in the UK or overseas should continue to sit in the House of Lords.

"Members of the House of Commons are automatically disqualified on conviction and there is no reason why the same rules should not apply to members of the upper house.

"It is essential that a change in the law to that effect is included in the government's constitutional reform bill."

WESLEY JOHNSON in Chicago

Soundbites from a Spectacle

LAWYERS defending Conrad Black told jurors to ignore as irrelevant Black's frequent flights of elaborate and high-flown rhetoric.

But Lord Black of Crossharbour was not the only key character in the trial who was adept at producing soundbites.

Here is the trial in quotes:

• "Bank robbers wear masks and use guns. Burglars wear dark clothing and use a crowbar. These four, three lawyers and an accountant, dressed in ties and wore a suit." - Assistant US attorney Jeffrey Cramer in his opening statement

• "Are you taught this? Is there some kind of skimming school?" - Black's defence lawyer, Edward Greenspan, to James Thompson, a former Illinois governor and former chairman of Hollinger International's audit committee, who testified he only "skimmed" key documents

• "They are either Olympic liars or Olympic skimmers." - Mr Greenspan on Hollinger's audit committee

• "We just got back yesterday from a shambles of a trip to the South Pacific, where I came down with bronchitis and almost drowned snorkelling as a result. We felt like geriatric freaks among a sea of honeymooners - loutish young men and their perky wives." - Black, in an e-mail to New York Sun newspaper editor Seth Lipsky, on his trip to Bora Bora

• "It's war. I'm on an inexorable march to victory... I see the trend. My strategy is working." - Black, outside court

• "My advice to Mr Black was to be a little bit more humble. I suggested he take a more quiet tone. I thought it was in the best interest of the company." - Marie-Josee Kravis, a former Hollinger director

• "The rules don't apply to Conrad Black. He wanted those documents out and he took them. Classic, classic Conrad Black." - Assistant US attorney Julie Ruder on Black's removal of 13 boxes of documents from his office despite a ban on taking away anything that could be federal grand jury evidence.

• "There was no sackcloth and ashes for him." - Ms Ruder on Black's lifestyle

• "He is different than you and me. He's a rich man. But in America, you do not convict someone for being rich." - Mr Greenspan

• "You're all vermin. I used to be a journalist. I'm sick of it." - Barbara Amiel Black to journalists as the trial opened.